Free-Float Flounders as Nigerian Naira Hits Black-Market Low
- Street traders skeptical about central bank’s liquidity pledge
- Official rate seen as unsustainable as dollar shortage endures
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Sitting in his cramped office in the basement of a Chinese-themed hotel in Lagos, Abubakar Mohammed complains about a shortage of dollars that’s crippling Nigeria’s economy and driving black-market naira rates to a record.
The experience of the 37-year-old, who runs one of Nigeria’s roughly 3,000 money-trading outlets known as bureaux de change, or BDCs, belies central bank Governor Godwin Emefiele’s insistence that liquidity has improved since policy makers said they would allow the naira to trade freely in the interbank market more than three months ago, resulting in a depreciation of 38 percent against the U.S. currency.